Studies & Degrees in Financial Management
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Financial Management Study Programs
The famous line of Tom Cruise in his movie Jerry Maguire, “Show me the money!” is the reality every for-profit organization deals with everyday. Businesses, large or small, exist for profit. At the end of the day, organizations (except, of course, for charity and not-for-profit civic organizations) are measured not on how large the building is, not on the number of staff employed, and not on popularity; but on the strength of their financial stance. This is the reality of life. This is why Finance is one of the pillars of every organization. This is the group that ensures the organization is in good financial shape to sustain the business existence and growth.
Financial Management (FM) is an ongoing process and not something organizations do on ad hoc basis. This is one field of Finance that handles financial planning, financial risks management, financial analysis and control, financial accounting, and financial reporting.
Financial planning is about identifying possible resources, planning organization’s budget based on anticipated resources, and allocating this budget to appropriate, necessary, efficient, and timely expenditure. This should always take into account possible financial risks, like uncertainty of collecting revenue from expected source on specified timeframe. Consequently, a fall-back plan should always be in place. It is said that a good financial manager should be as good in Plan B as he is in Plan A. Financial control, on the other hand, is about monitoring how the actual inflow and outflow of cash relates to the budgeted cash flow. Control mechanism comes in when income and expenditures do not go as planned. This is when we usually hear “budget cut,” “pay cut,” “cost-cutting,” etc. Unlike not-for-profit organizations, for-profit organizations follow strict financial accounting principles and methodologies. This is because every for-profit organization has financial accountability to its stockholders. Stockholders provide the financial means for the company, and these people expect profit from their investment in return. Every single cent in for-profit organizations is tracked and reported. Financial reporting plays a vital role in financial management. Financial reports are submitted to shareholders, and these should include no specious financial information and interpretation. Transparency is of utmost consideration in financial management. Due to sensitivity of financial reports, there are shareholders who actually opt to have third party audit of the report to ensure its integrity.
Career in financial management is in demand everywhere. As opposed to how some perceive it that financial management career is in demand only in financial organizations, such as banks, lending companies, and insurance companies, financial management is actually not industry-specific. Financial principles and methodologies apply across various industries; although there are industry-specific specializations and regulations, which can be learned either in classroom or as someone gets immersed in the business process per se.
While organizations go for people with significant exposure in this field, having strong educational background or formal training is definitely a plus. Fields of study that typically qualify for this career include Finance, Accounting, Business Administration, Management, and Economics. Preference is given to those with master’s degree in any of the said fields of study. Some organizations require their middle to top management team to have financial management training.
Job positions for Financial Management:
Stock Market Analyst
Stock Market Analysts are often labeled as the gods, gurus and wizards of the stock market and sometimes, even, doomsayers. Their words can trigger spurious buying or mass selling depending if they gave a buy or sell recommendation. Investors truly revere these analysts so much that some analysts even publish their own newsletters subscribed to by their loyal following, for a fee, of course. As an added perk of the trade, business channels like Bloomberg and CNBC usually seek out Market Analysts to be resource persons during pre-opening and post-market analysis.
Stock Market Analysts are usually employed by brokerage houses but the famous analysts are those working for the likes of Merrill Lynch, JP Morgan, Morgan Stanley, Goldman Sachs, and Lehman Brothers. These broker houses usually assign one Market Analyst for every industry. Of course, each industry has corresponding companies that comprise the industry. So let’s say a Market Analyst is following the software industry, more or less, the developments in companies like Oracle, Microsoft and Adobe, to name of few, would be his responsibility to monitor. The Market Analyst would be looking out for developments happening in these companies like mergers and acquisitions, expansions and consolidations and assess its overall impact to the company or companies’ future stock price. It is also up to the Analyst to coordinate with the investor relations department of each company to ask for important data that may be useful to the brokerage firms trading strategy.
Market Analysts generally employ two approaches in analyzing the market. One is fundamental approach and the other is technical approach. Old-school Analysts rely mostly on fundamental analysis that is, relying on basic indicators like if a company is registering profits, giving regular dividends and has future plans of expanding their operations. On the other hand, technical analysis relies mostly on computer programs. These programs generate charts and graphs that would chart out buying and selling points. Once the buying and selling points have been determined, they can now formulate trading strategies. The difference between fundamental and technical analysts is that technical analysts would buy a stock even though a company is not making money or doesn’t have a single asset as long as their chart gives a buying indication, they would do so without qualms without batting an eyelash. However, there are also those going for the middle ground, some Analysts would use fundamental analysis when choosing a stock to buy and then use charts to time buying and selling of stocks.
Predicting where the market, an industry, or particular stocks are going is indeed like an immensely pressure-filled job. Immense pressure because all the firm’s brokers are depending on the analyst’s findings so they can pass it on to their individual clients. Not only that, the public is always eager to hear what they think, more so the big clients who trusted the firm to safeguard their money. Indeed, the services of Market Analysts are the life blood of a full-service stock brokerage and one wrong call could really trigger a client exodus.
Becoming a Market Analyst was very mysterious as if they’re a secret fraternity. But now, the shroud of mystery has been lifted, those targeting the high profile broker houses positions could now easily position themselves in landing these coveted jobs by enrolling in courses like Financial Markets from reputable schools, not to mention getting above average grades.